Employee engagement: how business goals can be achieved

through employee well-being

ANNA SZABOWSKA-WALASZCZYK – ANNA MARIA ZAWADZKA – ANDRZEJ
BRZOZOWSKI

„…man is treated as an instrument of production, where as he – he alone, independently of the work he

does – ought to be treated as the effective subject of work and its true maker and creator”
(John Paul II. 1981)

The aim of this article is to provide an answer to a question – is it possible to have great
business results and flourishing workforce at the same time? Many organizations are facing
the dilemma of satisfying different stakeholders demands – shareholders expect increasing
profits, society wants responsible business. These seem to be opposite goals, but as they say –
opposites attract – especially when it comes to employee engagement.
Employee engagement is a state that has numerous beneficial outcomes for both the
workforce and the employer. Engaged employees are passionate about their jobs, are
fulfilling their potential and have enhanced well-being (satisfaction with life, health), feelings
of purpose and meaning (Salanova et al 2010, Schaufeli et al 2008). Greater performance is
possible without exploting the workforce.
Review of engagement theory and practice in this presentation will let us see that the
transfer from “scientific management” to Positive Organizational Scholarship is possible.

Keywords: employee engagement, well-being, satisfaction with life, performance, business

results

1. Introduction
Many organizations are facing the dilemma of satisfying different stakeholders’ demands –
shareholders expect increasing profits, the society wants responsible business. Growing global
competition and socio-economic climate force organizations to „do more with less”.
Increasing evidence of social, cultural and environmental costs of economic growth makes
organizations adopt the view of the sustainable development – “meeting the needs of the
present without compromising the ability of future generations to meet their own needs”
(WCED 1987). Therefore it is important that managers focus on making their employees
flourish rather than exploiting them. However for many managers the well-being of their
employees and business results seem to be opposite goals, while for psychologist or HR
specialist quite contradictory – how is it possible?
First of all, entrepreneurs try to achieve constantly increasing profit and some
assumptions and rules that underlay scientific management theory may be compelling to
them, hence they practice some of the ideas introduced in 1911 by Taylor (2003), like the
need to:
− develop a science for each element of a man's work,
− select and then train, teach, and develop the workmen,
− cooperate with the men so as to insure all of the work being done in accordance with the
principles of the science which has been developed,
− take over all work for which they are better fitted by management.

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 Most importantly – Taylor has highlited the importance of paying for performance,
which allows to control behavior and makes people strive for better results. Taking these
elements into account, managers use performance management tools and measures which
makes it possible to summarize all organizational behavior by fierce KPI – making the human
factor redundant.
Unfortunately, what was most important to Taylor, has faded away. In the first chapter
of his book in which he underlays the principles of scientific management, he states that “the
principal object of management should be to secure the maximum prosperity for the
employer, coupled with the maximum prosperity for each employee” (Taylor 2003, p. 9.).
Further he explains that prosperity of employer means “development of every branch of the
business to its highest state of excellence” and prosperity of employee: “development of each
man to his state of maximum efficiency, so that he may be able to do, generally speaking, the
highest grade of work for which his natural abilities fit him, and it further means giving him,
when possible, this class of work to do”. Taylor also notices that although it would be natural
to assume these ideas as leading objectives of management, the reality is different: these seem
to be antagonistic perspectives. This observation remains true – as Easterlin (1996) noted –
paradoxically the explosion of goods and services as well as rise of aspirations that came with
industrial revolution made it even more difficult to experience well-being.
What can now be observed is the turn to the idea of sustainable development – the need
that was forseen by Taylor 100 years ago (Jaros 2005, WCED 1987).
This is also related with the fact that nowadays more and more psychological research is
contributed to finding out how we can make it easier for people to experience well-being –
and this is the main aim of positive psychology. Positive psychology shifts managers’
attention from negative states (like depression or stress) to positives states (engagement,
feeling good). As Seligman and Csikszentmihalyi (2000, p. 5.) noted, until now the research
focused too much on pathology and repairing, instead of concentrating on building positive
qualities and enhancing „fulfilled individual and thriving community”.
Summing up, from economists’ point of view for success in management the need is to
focus on the economic indicators of profitability of an organization (i.e. high profits, cost
reduction). Psychologists hold an opposite point of view that the indicator of business success
is well-being of workers. What we know from previous research is that a) engagement is the
one of the most important well-being indicators (Csikszentmihalyi 1990), b) employee
engagement predicts employee turnover and customer loyalty (Harter et al 2002), c)
psychological well-being of workers predicts, to some extend, their productivity (Donald et al
2005).
Hence, the aim of this paper is to discuss the necessity to focus on employee
engagement in successful and profitable business management today.
In this paper we give a short review of the following: the concept of well-being,
engagement as a component of well-being, reasons for increasing work/ employee
engagement and next we move on to discuss the importance of employee engagement in
business profitability.

2. Well-being through employee engagement

2.1. What is well-being?

Positive psychology and the study of well-being originally focused on happiness (subjective
well-being) assuming that it was enough if positive emotions outweighted the negative ones
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and people were satisfied with the key domains of life (Diener et al 1985). For example,
Veenhoven (1996) indicated in his research that happiness is linked with the income level and
GDP level. However, determining well-being only from hedonistic perspective is not enough,
as Csikszentmihalyi (1999) asks in one of his articles – „If we are so rich, why aren’t we
happy?”. It was found out, that it is not the economic conditions themselves that make people
happy (Howell–Howell 2008), but what they can do, the goals they have.
Currently, positive psychology research is shifting to eudaimonistic perspective – where
happiness means experiencing the meaning of life or having a purpose in life. For example,
self-determinantion theory (SDT), (Deci–Ryan 2000) presumes that if people are given a
chance to fulfill their basic needs, such as: competence, relatedness and autonomy, they will
experinece well-being. In Kasser’s aspiration model well-being is linked with pursuit of
intrinsic goals in life like self-acceptance, affiliation, community feeling and phisical health
(Kasser–Ryan 1996). Another model of well-being – PERMA (Seligman 2011) includes five
determinats of well-being: positive emotions, engagement, relationships, meaning and
accomplishment/achievement. The research shows that well-being is provided by daily
activities that allow one to satisfy one’s basic needs (Reis et al 2010). As Diener and Seligman
(2004) summarized, well being is conditioned by having resources to meet needs, having
supportive friends and family, having rewarding and engaging work as well as adequate
income, being healthy, having important goals related to one’s values and having feelings of
meaning.

2.2. Well-being at work: employee engagement link

As work is an everyday activity that on average fulfills about 77 000 hours of an adult
person’s life, and also can be viewed as a resource to satisfy other basic needs - it has
substantial influence on well-being. As Warr (1987) suggested, certain factors of the work
environment can be perceived as „vitamins” that enahnce well-being – these include for
example: skill variety, clarity, physical security, autonomy and control, social support and
interpersonal contact. Hence positive psychology research has also spread to work and
organizational environment – researchers claim that organizational studies should focus on
strengths and positive organizational behavior instead on pathology (Schaufeli–Bakker 2008).
Employee/work engagement is strongly associated with both psychological and physical
indicators of thriving and that is why it can be perceived as work-related well-being seen from
the eudemonistic perspective (Schaufeli–Salanova 2010). Firstly, highly engaged employees
have greater satisfaction with life (Wefald 2008, Szabowska-Walszczyk et al 2011a). A study
by Engagement Barometer (2011)1 for example shows that the most engaged employees can
experience even 50% higher levels of subjective well-being than the least engaged ones. Also
Rath and Harter (2010) show evidence that highly engaged employees are twice as likely to
be thriving – high on well-being. Engagement has been also found to be associated with
feelings of psychological meaningfulness (Van Zyl et al 2010).
Engagement is also associated with experiencing positive emotions more often, which
according to “broaden and build” theory by Fredrickson (2001) allows people to perform
better, as they become more out-going and effective. These findings can be also associated
with flow – an autotelic experience, that occurs when activity is so enjoyable, it is worth
doing just for itself (Csikszentmihalyi 1990).

1
Engagement Barometer (Barometr Zaanga owania) – a consulting company providing employee engagement research and
advisory services, located in Poland: http://barometrzaangazowania.com.
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 Another important engagement related outcome are self-efficacy beliefs (Bandura
1970) – person feels competent, able to achieve goals and accomplish success in what he or
she is doing – which can be easily associated with fulfilling basic needs (Salanova et al 2010).
Longitudinal studies conducted by Hakanen et al (2008), Salanova et al (2006) and
Xanthopoulou et al (2009) prove the existence of a “spiral of positive gains” – an engaged
employee makes better use of available personal and job resources and hence is more
effective and receives positive feedback, which in turn enhances engagement.
Further well-being contribution is the positive relationship between employee
engagement and greater self-reported health. Evidence supporting this thesis can be found in
several studies: Hakanen et al (2006), Schaufeli et al (2008), Schaufeli et al (2006). More
specifically, engaged employees report less headaches, cardiovascular problems or stomach
aches (Schaufeli–Bakker 2004). Agrawal–Harter (2009) have also found that disengaged
employees are twice as likely to be diagnosed depression, have higher stress levels and also
have greater risk for heart disease.
Strong evidence supporting the existence of a positive relationship between engagement
and well-being (both psychological and physical) as opposed to ill-being can be found in
research regarding the difference between work engagement and workaholism. Although both
seem similar work-related states when we consider such elements as: excessive hours worked
or dedication to work, these states differ substantially. Schaufeli et al (2008) have shown that
workaholics feel somewhat forced to work (drive) which results in lack of enjoyment of work
and greater health problems, while engagement leads to better health and enthusiasm.
Similarly in a study by Schaufeli et al (2006) high levels of engagement indicated greater
satisfaction with life while workaholism quite the opposite.

3. How to increase employee engagement?

3.1. Capturing employee engagement

In the past decade employee engagement has gained attention of both: academia and
practitioners. This is because engagement connotes: high levels of energy, being absorbed
with tasks, innovativeness, dedication to goals etc. – and these qualities make it an interesting
concept for consulting companies and academic researchers, as it is beneficial for
organization and the employee.
The broadest perspective is “employee engagement” – which indicates the relationship
between a person and performed work including the organizational context (Schaufeli–Bakker
2010). The assumption that engagement can be defined in an organizational context agrees
with what Macey and Schneider (2008) have concluded in their meta-analytic review, as well
as with the evidence concerning the importance of self-efficacy beliefs, which are associated
with performance, that can be evaluated only when work environment is taken into account.
An example of this perspective is a definition introduced by Engagement Barometer
(2011), see also Szabowska-Walaszczyk et al 2011b) that follows: employee engagement is a
positive state that results in behavior beneficial for the employer, where positive state means:
enjoying work and optimism towards tasks, giving the best of yourself and treating working
for the organization as an important part of life. More specifically these elements connote
being engrossed with one’s work cognitively, physically and emotionally as the person: likes
performed work, uses full potential as in an autotelic experience (i.e. flow); enjoys intense
work and is energetic, feels as if the time flew by; feels the work is meaningful and relates
oneself to the success of the organization as a whole. Employee engagement is both: job and
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organizational engagement (Saks 2006). What follows engagement are specific behaviors and
attitudes (loyalty), that accumulated in time and number lead to business related outcomes.
Some researchers focus only on work engagement itself, for example Schaufeli and
Bakker (2004) define it as a positive, fulfilling, work-related state of mind that is
characterized by vigor, dedication, and absorption. However Bakker and Demerouti (2008)
also suggest that work engagement research is a part of positive organizational behavior
(POB) paradigm, defined as “study and application of positively oriented human resource
strengths and psychological capacities that can be measured, developed, and effectively
managed for performance improvement in today’s workplace” (Luthans 2002, p. 59.), that
also relates to the organizational context, hence the term work and employee engagement are
used interchangeably in this article.
What is common for either of perspectives is that engagement is perceived as a positive
work-related state that:

− is characterised by enjoyment of work, high levels of energy, as well as cognitive and

emotional dedication to work,
− is relatively stable across time,
− is measurable and is influenced by performed work and work environment (functioning
of an organization and co-workers),
− has positive results for the person itself and the employer.

3.2. Drivers of engagement

Other important issue is the necessity to differentiate engagement from its antecedents
(drivers) and direct or indirect results, which allows it to be measurable – this was noted by
Saks (2006), Macey and Schneider (2008) and Szabowska-Walaszczyk (2010). Macey and
Schneider (2008) specifically refer to “engagement scales” that in fact measure drivers of
engagement or focus mostly on results, such as particular behaviour. Such an approach makes
it impossible to measure engagement itself, not to mention suggesting what can be done to
enhance it.
What is also crucial, is the fact that employee engagement is a state distinguishable
from other positive work related states such as job satisfaction or organizational commitment
(Macey and Schneider 2008). The main difference is that engagement consist of energy-
activation component and satisfaction is more a satiation-like state that connotes contentment
with conditions of work, furthermore organizational commitment is a binding force between a
person and the employer, and doesn’t have to include the relationship with ones work
(Schaufeli–Bakker 2010). It should also be noted that commitment, especially if defined as in
three component model by Meyer and Allen (1991): with affective, continuance and
normative commitment, doesn’t necessarily have positive connotation as it can be a “binding
force” not enjoyment of work (Bańka et al 2002). Also studies by Hallberg and Schaufeli
(2006) have provided empirical evidence that work engagement cannot be equalled with
either organizational commitment or job involvement.
If engagement is defined as a distinct and unique state it can be measured and managed
through enhancing the qualities of work and organizational environment that drive
engagement - “job resources” (Bakker 2011). In the academic literature following antecedents
of employee/work engagement have been found: social support from colleagues and
supervisors, performance feedback, skill variety, autonomy, and learning opportunities
(Bakker–Demerouti 2007), information and innovative climate (Hakanen et al 2006), rewards

422
and recognition (Koyuncu et al 2006), work-life balance (Sonnentag 2003), procedural justice
and job characteristics (Saks 2006). At the same time lack of job resources and presence of
job demands – difficult conditions could evoke burn-out – through excessive workload,
emotional demands, time pressure, difficult physical conditions (Bakker 2011).
One of the most important elements is the leadership style or the quality of management
that is presented by the immediate manager. Wefald has proved that what fosters high levels
of engagement is transformational leadership (Wefald 2008), this relationship was also
confirmed by Zhu et al (2008) – with correlation reaching r=0,58 (p<0,01). Similarly
Szabowska-Walaszczyk and Zawadzka (2011) have studied this mechanism more carefully – it
seems that when employees rate their supervisor lower as far as the quality of management is
concerned, they also perceive their organization as functioning worse. This concerns
especially such dimensions as: internal communication, change management, empowerment
and participation, opportunity to learn and use skills, employment policy. Furthermore, this
was related to lower levels of engagement and more limited scope of positive organizational
behaviors.
Research also shows that that some personal characteristics (“personal resources”) such
as: self-efficacy, organization-based self-esteem, optimism, locus of control are positively
related to engagement, or can even be treated as its predictors (Albrecht 2010). Employees
possessing these qualities are more likely to approach more demanding goals, even in
presence of job demands and make better use of available resources (Salanova et al 2010).

4. Employee engagement and business results

The link between employee engagement and positive business results has been confirmed in
several studies – for overview see MacLeod and Clarke (2009), Bakker (2011). As Arnold
Bakker (2011) has summarized, four reasons can be found why engaged employees perform
better:
− positive emotions caused by engagement allow greater thought-action repertoire,
− better health means that all resources and skills can be dedicated to work,
− feelings of self-efficacy allow creation and better use of job and personal resources,
− high levels of engagement of one person positively influences whole teams and evokes
greater collaborative effort.

What is most important engagement leads to “going an extra mile”, which in literature
is defined by concepts such as: discretionary effort, extra-role behavior or organizational
citizenship behavior (Macey–Schneider 2008, Xanthopoulou et al 2009). More specifically
engagement is connoted with pursuit of better performance, persistence in achievement of
goals, seeking innovative methods of work, praising the company (products and as employer),
being loyal and working more as well as more intensively – see Szabowska-Walszczyk et al
(2011b) for details. These behaviors lead to business results such as: enhanced quality of
external and internal customer service, effective key organizational processes, lessened
absence, decreased fluctuation, greater productivity and improved financial results (see Table
1).

423
 Table 1. How em
mployee eng
gagement drives successs

ometer (2011))
Source: Enggagement Baro

Foor example a diary study conduct ed by Xanth hopoulou ett al (2009) on employeees from
several fast-food restaurants
r has shownn that daily y levels off employeee engagemeent were
significaant predictoors of finan ncial returnns. An impo or that influuenced engagement
ortant facto
was suppportive behavior of the managerr, that had coached th he employeee. In anoth her diary
study (XXanthopouloou et al 200 08) the leveel of engageement had positive
p inflluence on exxtra-role
(helpingg company overall imaage, helpingg coworkerrs) and in-ro ole perform
mance (fulfillling job
requiremments and objectives).
o
Siimilarly Sallanova et all (2005) hass analyzed the t influencce of work engagemen nt among
customeer service employees: sample
s connsisted of ov
ver hundred d units: 58 hhotel receptions and
56 restaaurants. Thhe results shows that employees that had resources
r su
such as: au utonomy,
trainingg and technnology (too ols) had grreater levells of engag gement andd this had positive
influencce on servicce climate. As a resultt customers perceived these front--desk emplo oyees as
providinng great seervice (high h levels off performan nce): putting themselvves into customer’s
place, ddoing moree than usuaal and surprrising them m with exceellent qualiity, being empathic
e
towardss needs – all a that has positively influenced levels of customer
c looyalty. Engagement
level was also prooved to have positive iinfluence on n unit inno
ovativeness as was sho own in a
study byy Hakanen et al (2008)).
AApart from maximizin ng profits and perforrmance, orrganizationss try to minimize m
fluctuattion as hirinng new employees is coostly: team performanc
p ce is temporrarily decreaased and
very offten so valuuable “know w-how” is lost. Reseaarch shows that high engagemen nt means
loyalty and associiating ones future withh current employer
e – negative ccorrelation between
engagem ment and inntention to quit is ratther strong, for example r=-0,4775, p<0,01 (Wefald
2008). Similarly Saks (2006 6) has shoown that high h engaggement sign gnificantly lessened
intentions to quit – standardized β coefficcients in mu d β=0,33
ultiple regreession analyyses equaled
(p<0,01).
AAs mentioneed before em mployee enngagement also correlaates with bbetter health h – from
organizaational persspective thiis is an impportant outccome that can c help deecrease abseence and
costs off sicknessess – highly en ngaged empployees are reported to o take even up to 2,5 times less
sick dayys than thosse low on en ngagement (Engagemeent Barometer 2011). SSimilar resu ults were
reportedd by Schauf ufeli et al (2
2009) – enngagement was w negativ vely correlaated with voluntary
v
absencee (frequencyy of taking days off), and burn out o (as a sttate of ill-bbeing) prediicted the
durationn of absencee.

424
 Several studies have also been done by the Gallup Organization in order to provide
evidence of positive relationship between employee engagement and business outcomes. As
Harter et al (2003) state, the correlation between engagement and performance is between
r=0,26 (within companies) and r=0,33 (across companies). When standard deviations of
performance are taken into account, the dependence is such, that business units with employee
engagement level above the median achieve results 0,5 above standard deviation of accepted
performance units. A meta-analytic review involving 8000 business units (Harter et al 2002)
has shown that when comparing high and low engagement teams, following average
differences can be found: 10%-29% less turnover, 1,9%-4,4% greater customer satisfaction,
80 000-120.000 $ higher revenue (sale) per month. Additionally, Rath and Harter (2010),
state that the annual cost of lost productivity due to sick days can differ substantially
depending on employee well-being: for those who are low on well-being estimated cost
reaches $28 800, while for people high on well-being – $840. In other words, these
researchers have found a significant relationship between employee well-being (understood as
work engagement) and customer satisfaction, business productivity and profitability.

5. Conclusions
Joseph Stiglits, the Nobel prize winner in economy, said, “What you measure affects what
you do. If you don’t measure the right thing, you don’t do the right thing” (Goodman 2009).
All studies reviewed above show that employee engagement, resulting from well-being at
workplace, can have a substantial influence on the competitive advantage of companies,
which proves, in turn, that the approach of sustainable growth has extensive grounds.
Organizations have to change their views on how to lead successful business nowadays. It is
time to shift from focus on primacy of capital and profit increase to focus on components of
well-being in organization – on work/employee engagement. The engagement theorists,
Schufeli and Salanova (2010), suggest that enhancement of engagement is a very important
issue that should receive constant attention from managers. Hence, they suggest that the term
“amplition” should be used for management of engagement, meaning continuous
improvement of work and work environment quality, instead of interventions.
There are some additional arguments indicating the necessity to shift from
money/capital increase to engagement/ human account. There is a great amount of research on
the negative effects of focusing on money. When people focus on money they are more
competitive, greedy and antisocial (Vohs at al 2008) which could influence negatively team
work and organizational climate. We also have to be aware of growing consumer force on
business management – consumers want to make sure that organizations have “a human
face”, that is related with Corporate Social Responsibility politics introduced more and more
often worldwide. There are some well-known cases of business problems in which workers
suffered from ill-being (bad work conditions, breaking human rights, Klein 2004, Zawadzka
2010) which resulted in consumer boycott of their products.
Summing up, in the XXI century when the world economy should follow the idea of
sustainable development and successful business needs to have “a human face” to develop
and exist. We have to reconsider again the Maslow (1968) idea that humanitarian and wise
management policy focus on social capital can return in profit. It is rightful to state that a
paradigm of “economics of well-being” (Rath–Harter 2010) or “economy of well-being”
(Diener–Seligman 2004) should be considered as a focal point of strategy planning and
research.

425
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